26.06.2025 19:29

The British pound surged to its highest level against the US dollar in nearly four years on Thursday, fueled by market uncertainty surrounding the potential replacement of Federal Reserve Chair Jerome Powell. This dramatic rise, pushing the GBP/USD exchange rate to 1.3746 (a 0.61% increase), followed a Wall Street Journal report indicating President Trump might announce Powell's successor as early as September or October.

This news injected significant volatility into the markets, weakening the dollar considerably. The prospect of a new Fed chair, potentially among candidates like former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett, or Treasury Secretary Scott Bessent (as cited by the WSJ article), introduced considerable uncertainty. Investors now face the added complexity of interpreting statements from both the current and soon-to-be-former Fed chair, further complicating their decision-making processes.

Adding to the dollar's decline were mixed economic signals from the United States. While initial jobless claims for the week ending June 21st undershot expectations at 236,000, the preceding data points painted a more ambiguous picture. Two of the last three readings exceeded forecasts, hinting at potential upward pressure on unemployment. Conversely, US durable goods orders experienced a significant increase in May, primarily driven by a surge in commercial aircraft bookings.

Meanwhile, the Bank of England's Governor, Mark Carney, seemed to favor a gradual easing of monetary policy. Market sentiment reflects this dovish stance, with a 76% probability priced into the market for an interest rate cut in August. The resulting contrast between the relatively more hawkish stance of the US economy and uncertainty surrounding the future of its monetary policy, when combined with the dovish leanings of the Bank of England, significantly bolstered the pound's position.